The funding will be used to upgrade Xpressbees’ technology and expand its operations, said Amitava Saha, the company’s CEO.

The funding will be used to upgrade Xpressbees’ technology and expand its operations, said Amitava Saha, the company’s CEO.

Xpressbees, the logistics business spun out of baby and maternity products retailer Firstcry last year, has secured Rs 85 crore in funding from its existing investors, which include SAIF Partners, IDG Ventures India, NEA, Vertex Ventures and Valiant Capital.

The funding will be used to upgrade Xpressbees’ technology and expand its operations, said Amitava Saha, the company’s CEO. The company is looking to take on other etailing-focused logistics players like Tiger Global-backed Delhivery and Warburg Pincus-backed Ecom Express.

"We will conservatively look to double the number of deliveries by next year, and there could also be inorganic opportunities as well," said Saha, who sees the market consolidating in the next one-two years.

Owned by Busybees Logistics Solutions, Xpressbees claims to have scaled to over 100,000 deliveries a day on just $5 million in funding. The business has been built by FirstCry founders Supam Maheshwari and Saha.

The funds come at a time when even large etailers are looking to build their supply chain units—Flipkart is trying to turn ekart into an independent business while Amazon is aggressively expanding its logistics footprint.

Firstcry had started logistics business in 2012 when it decided to start express deliveries of its products, and then forayed into third-party logistics (3PL) at the beginning of 2015. The company was spun off as BusyBees in September 2015 and has ramped up orders significantly since then.

Logistics for etailers provides a large opportunity. "Driven by growing etailing demand, we believe that the order volume for ecommerce shipments will increase 13x between CY14 and CY20. We believe overall volume of ecommerce orders will amount to 2,000 tonnes per day by CY20," said a recent report by IIFL on the Indian internet.

Experts tracking the logistics industry say that initially XpressBees was considered a specialist, as it transported items like baby strollers when the industry was focused on more standardised items like apparels, books and electronics. But the basket of goods being transported by etailing industry also includes larger goods, giving specialised players like XpressBees an edge.

"Volumetric shipments from etailing companies has also grown with consumers buying furniture, consumer durables, which other 3PL players were not able to handle, but created a market for players like XpressBees," said Manish Saigal, managing director at Alvarez & Marsal India, adding that Xpressbees has also been able to use multiple modes of transport.

But the challenge for XpressBees will be to expand its reach to smaller towns, and get big etailers as clients, according to Saigal.

XpressBees delivers to 200 cities, with ‘same day’ and ‘next day’ delivery in nearly 100 cities, and covers over 3,000 pin codes. Saha expects to expand this network further. Also on the cards is starting a premium express logistics business for traditional business, which Saha says is a $5.5 billion market right now.

Investors are betting on the company to build the largest ecommerce logistics business. “They have achieved the current scale with a very low cash burn. We believe that Xpressbees has the potential to dominate the ecommerce logistics market in India," said Sudhir Sethi, founder and chairman of IDG Ventures India.

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